Headline News Archives

Wednesday 02.01.2017

Trump's immigration ban addresses an 'emergent threat' on terror: Conservative think tank

The implementation of President Donald Trump's temporary immigration ban could have been better, but the measures themselves will help keep Americans safer, said James Carafano, vice president of foreign and defense studies at conservative think tank The Heritage Foundation.

The uproar over Friday's executive order, temporarily banning entry to the U.S. by travelers from seven Muslim-majority countries, has been "all about the politics and not the substance of the programs," Carafano, who worked on Trump's transition team, told CNBC's "Squawk Box" on Tuesday.

"They knew what they were getting into when they wrote this policy. They knew everybody was going to hate them. And they did it anyway, because they thought it was the right thing to do for national security," he said.

"This was the administration trying to get ahead of what is an emergent threat that every terrorism expert in the world recognizes. And to make sure we can cut off the pipelines, so foreign fighters don't come from those seven countries to the United States," Carafano said. The seven nations in question — Iraq, Iran, Libya, Somalia, Sudan, Syria and Yemen — were first singled out as "countries of concern" by former President Barack Obama.

Millennials think housing no longer part of American Dream

The homeownership rate remained the same in the fourth quarter as the previous year and the previous quarter, according to today’s report from the U.S. Census Bureau. The national homeownership rate slipped only slightly to 63.7% in the fourth quarter. This is down from the previous year’s 63.8% and up slightly from the third quarter’s 63.5%.

One economist explains that the lack of inventory is partially to blame for the low homeownership rate. “After reaching a 50-year low in mid-2016, the homeownership rate edged up for the second consecutive time in the final quarter,” Capital Economics Property Economist Matthew Pointon said. “A lack of inventory is preventing a faster rebound in homeownership.”

The national vacancy rates for rental housing in the fourth quarter of 2016 dipped slightly from 7% in the fourth quarter of 2015 to 6.9%. This is a slight increase from the third quarter’s 6.8%. Similarly, the homeowner vacancy rate of 1.8% is also slightly down from the fourth quarter of 2015’s 1.9% and the same as the third quarter’s rate.

But this could get even worse in the year ahead. Trulia’s end of the year survey shows the share of Americans who say homeownership is part of the American dream dropped for the first time in five years from 75% last year to 72%. This drop was even more extreme among Millennials. While in 2015 80% of Millennials said buying a home was part of the American dream, the survey at the end of 2016 showed that number dropped to 72%, now even with everyone else.

ABC Exclusive: US May Have Let 'Dozens' of Terrorists Into Country As Refugees - (Nov. 20, 2013)

Originally published Nov. 20, 2013

Several dozen suspected terrorist bombmakers, including some believed to have targeted American troops, may have mistakenly been allowed to move to the United States as war refugees, according to FBI agents investigating the remnants of roadside bombs recovered from Iraq and Afghanistan.

The discovery in 2009 of two al Qaeda-Iraq terrorists living as refugees in Bowling Green, Kentucky -- who later admitted in court that they'd attacked U.S. soldiers in Iraq -- prompted the bureau to assign hundreds of specialists to an around-the-clock effort aimed at checking its archive of 100,000 improvised explosive devices collected in the war zones, known as IEDs, for other suspected terrorists' fingerprints.

"We are currently supporting dozens of current counter-terrorism investigations like that," FBI Agent Gregory Carl, director of the Terrorist Explosive Device Analytical Center (TEDAC), said in an ABC News interview to be broadcast tonight on ABC News' "World News with Diane Sawyer" and "Nightline".

"I wouldn't be surprised if there were many more than that," said House Committee on Homeland Security Chairman Michael McCaul. "And these are trained terrorists in the art of bombmaking that are inside the United States; and quite frankly, from a homeland security perspective, that really concerns me."

Uber strikes deal with Daimler to add self-driving Mercedes-Benz to fleet

Uber Technologies Inc [UBER.UL] has signed another deal with a major automaker as the popular ride service accelerates efforts to build out one of the world’s first fleets of autonomous vehicles.

Uber on Tuesday announced a partnership with Germany’s Daimler AG, maker of the luxury Mercedes-Benz cars and trucks. In the coming years, Daimler plans to incorporate its own self-driving Mercedes-Benz into Uber’s growing fleet of self-driving cars.

Uber did not offer a specific timeline. Daimler is the first auto company to join Uber as it opens up its platform for manufacturers to introduce their own self-driving cars. Relationships with automakers are imperative to the San Francisco company’s self-driving car efforts. Although the ride-hailing service is pouring resources into developing autonomous technology – a key component of its business strategy to rely less on human drivers – it is not equipped to build the cars itself.

“Auto manufacturers like Daimler are crucial to our strategy because Uber has no experience making cars — and in fact, making cars is really hard,” Uber Chief Executive Travis Kalanick said in a blog post. Such alliances are increasingly common between automakers and startups, as more traditional vehicle manufacturers perceive Silicon Valley firms as threats to their industry.

Flashback 2005: Sen.Obama On Illegal Immigration

Growth in U.S.–China trade deficit between 2001 and 2015 cost 3.4 million jobs

The United States has a massive trade deficit with China. It has grown since the end of the Great Recession. The growth of that deficit almost entirely explains the failure of manufacturing employment to fully recover along with the rest of the economy. And as other studies have suggested, the trade deficit has cost us millions of jobs since China entered the World Trade Organization (WTO) in 2001.

The growth of the trade deficit means that the United States is both losing jobs in manufacturing (in electronics and high tech, apparel, textiles, and a range of heavier durable goods industries) and missing opportunities to add jobs in manufacturing (in exporting industries such as transport equipment, agricultural products, computer and electronic parts, chemicals, machinery, and food and beverages) because imports from China have soared, and exports have increased much less.

The trade deficit with China affects different regions in different ways. Some regions are devastated by layoffs and factory closings while others are surviving but not growing the way they could be if new factories were opening and existing plants were hiring more workers. This slowdown in manufacturing job generation is also contributing to stagnating wages and incomes of typical workers and widening inequality.

Following are the specific problems that call for a policy response: Due to the trade deficit with China 3.4 million jobs were lost between 2001 and 2015, including 1.3 million jobs lost since the first year of the Great Recession in 2008. Nearly three-fourths (74.3 percent) of the jobs lost between 2001 and 2015 were in manufacturing (2.6 million manufacturing jobs displaced). The growing trade deficit with China has cost jobs in all 50 states and the District of Columbia, and in every congressional district in the United States.

Auto Industry: Possible Border Tax Would Raise Prices, Even On American-Made Cars

Facing a possible new tax on imported goods, some of the biggest name in auto manufacturing and retail are calling on lawmakers to rethink the tax, claiming it will hurt their businesses and lead to higher prices.

While no actual legislation has been introduced, the proposal that has been kicking around Capitol Hill for the last month or so involves cutting the current corporate income tax rate of 35% to 20%. To make up for that rate drop, companies would no longer be able to deduct the cost of imported goods from their profits.

So, for example, imagine a U.S. company that imports $1 million worth of product, and sells them for $2 million stateside after spending about $500,000 domestically, resulting in a profit of $500,000.

Under the current tax code, the company deducts the import and domestic expenses, and pays 35% tax, but only on the $500,000 profit. If this proposal is put in place, that company would not be able to deduct the $1 million of import costs, so it would pay the lower 20% tax, but on $1.5 million instead of $500,000.

Should Cash be Abolished?

At the World Economic Forum in Davos Switzerland, Joseph Stiglitz the Nobel Prize-winning economist argued in favor of phasing out currency and moving toward a digital economy.

The view expressed by Stiglitz is similar to that of former IMF chief economist Kenneth Rogoff who has been arguing for many years that there is an urgent need to remove cash from the economy. It is held that cash provides support to the shadow economy and permits tax evasion. Some estimates suggest this could be up to $700 billion in the US. The Governor of the Bank of England — Mark Carney — has expressed similar views in support of the removal of cash.

Yet another justification for its removal is that in times of economic shocks, which push the economy into recession, the run for cash exacerbates the downturn — i.e., it becomes a factor contributing to economic instability by facilitating a cash-induced savings surge rather than an increase in demand.

Other arguments go further, including the position that in the modern world most transactions can be settled by means of electronic funds transfer. Money in the modern world is an abstraction, or so it is held. But is it true that money is an abstraction?

Deutsche Bank fined $425M for Russian ‘mirror-trade’ scheme

New York’s Department of Financial Services fined Deutsche Bank $425 million on Monday for engaging in its notorious “mirror-trade” scheme that helped wealthy Russians launder $10 billion out of the country.

From 2011 to 2015, the bank, headed by CEO John Cryan, made complex trades that involved at least 12 companies buying stocks in Russia, according to a consent order.

A related company, which often had the same ownership, would then sell the same stocks in London to disguise the transaction and get around anti-money laundering laws.

“This Russian mirror-trading scheme occurred while the bank was on clear notice of serious and widespread compliance issues dating back a decade,” DFS Superintendent Maria T. Vullo said.

Gold spikes after Trump says other countries take advantage of the US by devaluing their currencies

Early Tuesday, Trump adviser Peter Navarro suggested Germany is taking advantage of the European Union and the United States by using a "grossly undervalued" euro.

A few hours later, President Trump chimed in saying that other countries take advantage of the US by devaluing their currencies, according to Reuters.

The precious metal held onto smalls gains ahead of Navarro's comments and spiked to its best level in a week shortly after his comments crossed the tape. Gold then consolidated near the $1,200 level before seeing another leg up following Trump's remarks.

So far, gold traders have not responded to a Trump presidency the way many on Wall Street thought they would. In a note to clients sent out in November, HSBC Chief Precious Metals Analyst James Steel wrote: A Trump win would be decidedly gold-bullish, in our view, given the potential for increased protectionism, higher budget spending and geopolitical risks. Gold prices could jump to USD1,500/oz relatively quickly, and end the year at that level on a Trump win. This could raise our 2016 average price to USD1,300/oz. For 2017, gold could rise further to USD1,575/oz by year end with an average of USD1,410/oz.

New Wave of Robots Set to Deliver the Goods, Literally

The robots of the future will be coming soon, rolling along at a lumbering pace with those goods you just ordered.

The six-wheeled, knee-high robots from startup Starship Technologies are part of a new wave of automated systems taking aim at the “last mile” delivery of goods to consumers. Starship is launching a pilot project of robotic deliveries of parcels, groceries and prepared foods in early February in Washington, D.C., with a similar test taking place in Redwood City, California.

The startup, created by two of the founders of Skype, Ahti Heinla and Janus Friis, has already begun testing in several European cities as part of an effort to bring new efficiencies to local delivery. The goal is to enable delivery within a radius of two miles within 15 to 30 minutes of an order, for $1 or less, with the autonomous robots traveling on sidewalks and alerting consumers of their arrival via smartphone app.

Starship spokesman Henry Harris-Burland said the founders were looking to “disrupt” an industry that had seen little efficiency improvement from new technology. “We’re trying to solve real social and economic problems,” Harris-Burland said during a demonstration of the delivery bots in Washington. “This will take cars and vans off the road. We can also provide deliveries to the elderly and handicapped who have difficulty getting around.”

UPS stock suffers biggest drop in 2 years as e-commerce surge is still causing problems

Shares of United Parcel Service were on track Tuesday to suffer their biggest one-day selloff in two years, as disappointing fourth-quarter results suggest the package-delivery giant was still having trouble adapting to the surge in online holiday shopping. The results were also a stark reminder that not all business is good business.

UPS reported before the market open fourth-quarter adjusted earnings and revenue that missed expectations, primarily because of what Chief Executive David Abney described on a post-results conference call as “a significant shift in mix towards lower revenue products,” according to a transcript provided by FactSet.

E-commerce business increased sharply during the peak holiday season, as many expected it would, but by a lot more than UPS had anticipated. Chief Financial Officer Richard Peretz said that the normal percentage of business-to-consumer (B2C) revenue to total revenue is 55%, and that spiked to 63% in December, marking the biggest swing in 10 years. “The peak season growth rate created an outlier,” Peretz told MarketWatch.

While that might seem like a good problem to have, that B2C business is a lower-revenue, narrower-margin business, so it came at a cost to the company. Peretz said roughly two-thirds to three-quarters of the earnings miss was a result of this big change in product mix.

Fed Survey: 51% Say Biggest Threat To Economy Is Protectionism

Does Starbucks ignore vets while helping refugees?

Starbucks is facing calls for a boycott on social media over CEO Howard Schulz’s plan to hire 10,000 refugees over the next five years. Critics argue that he’s helping foreigners at the expense of struggling veterans.

The Seattle-based company, though, has done quite a bit to help members of the military over the years, and evidence that veterans are losing out on job opportunities is sketchy at best.

The coffee house chain has hired 8,800 of the 10,000 veterans and active duty spouses that it pledged in 2013 that it would hire by 2018. Starbucks has dedicated recruiters who target members of the armed forces in “key focus cities,” including Washington, D.C., Seattle, and Austin.

It has also established more than 200 relationships with military bases in the U.S. and overseas and has attended more than 500 military hiring fairs that attract veterans and military spouses. “We have the potential to come together as a nation to change how people see and engage with our veterans and military spouses, express gratitude and recognize their service and sacrifice,” according to a statement the company provided to CBS MoneyWatch.

Critically High U.S. Silver Supply Reliance In Jeopardy When Paper Markets Crack

The U.S. silver supply will likely be in jeopardy in the future when the highly inflated paper markets finally crack. This is not a matter of if, but WHEN. If we consider the top two precious metals and copper, silver has the highest net import reliance as a percentage of domestic consumption.

According to the data put out by the USGS – U.S. Geological Survey, and the GFMS team at Thomson Reuters, the United States silver net import reliance as a percentage of total consumption, was 72%, versus 36% for copper and a negative 48% for gold:

The USGS reported that of the apparent 8,100 metric tons (260 million oz) of total silver consumption in 2015, the United States relied on 6,156 metric tons (198 million oz) of foreign silver imports to meet total demand. As we can see this was nearly the opposite percentage for copper. The United States only relied upon 36% of copper imports to meet its total copper consumption in 2015.

Now, for gold… it’s a much different story. The USGS did not provide any net import reliance percentages of total consumption for gold due to the following footnote in their 2016 Gold Commodity Summary: The United States has been a net exporter; however, large unreported investor stock changes preclude calculation of a meaningful net import reliance.

US consumers question retailers’ ability to protect their personal information

Merchants can bolster shoppers’ confidence by better understanding cybersecurity issues and taking more advanced anti-fraud precautions, experts recommend.

Most U.S. consumers don’t have a high level of confidence that their personal information will be safeguarded by retailers with whom they shop, according to a new Pew Research Center report.

Only 14% of adults surveyed were “very confident” that companies and retailers they do business with will protect the sensitive data collected about them, and 46% said they were “somewhat confident.” More than one-third of respondents expressed low levels of assuredness, with 21% “not too confident” and 15% “not at all confident” in the ability of retailers to securely handle their information.

“The results were not outside of the realm of what we expected. We saw a lack of confidence in entities people interact with daily, and that was very consistent with the public climate given the steady stream of hacks, breaches and cyberattacks by hostile entities that have been in the news,” says Aaron W. Smith, associate director of research at Pew. “The broader population feels as though the dissemination and use of their personal information is out of their control.”

The Chinese Credit Bubble

The confrontations between the U.S. and China on trade, currencies and geopolitics will begin immediately at a rhetorical level, but may take a year or two to play out at a policy level. Supply chains, long-term contracts, and reserve positions don’t turn on a dime even when new administrations are sworn in.

Yet, one issue that will not wait and is a ticking time bomb is the Chinese credit bubble. That bubble is primed to explode with or without new policies from Trump. When it happens and how it happens will have profound implications for your portfolio.

The dimensions of the problem are vast. China’s growth has become captive to what economists call Goodhart’s Law. This law says that when an economic metric becomes the goal of policy, it loses meaning as a metric. Goodhart’s Law applies in the case of Chinese GDP.

Once the Chinese government decided to “target” GDP growth of 8 percent, or 7 percent, or 6.5 percent more recently, GDP growth lost its meaning as a reliable guide to Chinese economic performance. Instead the Chinese hit the economic target by non-economic means merely to say they hit the target. For instance, my trip from Shanghai to Nanjing was on one of the new high-speed rail lines being built under direction from the central government in Beijing.

Why Trump’s legacy relies on the economy

Online grocer has shown off a fruit-picking robot

Online grocer Ocado has shown off a soft robotic hand that can pick fruit and vegetables, without damaging them, in its warehouses. The firm has an automated warehouse in Andover, Hampshire, where robots select crates containing specific items that make up customer orders.

They are currently brought over to a human team for selection but, in future, the hand could replace them. Also in development is a humanoid maintenance robot called SecondHands. It will work alongside a human colleague to maintain the warehouse.

The fruit and vegetable picker is part of a five-year research EU-funded collaboration between five European universities and Disney called Soma (Soft Manipulation), said Ocado spokesman Alexandru Voica. The demonstration device is an early prototype, he said.

"People have tried suction cups, robot hands with three fingers... What we are trying to do is to actually mimic the human hand. "The gripper is based on air pressure, which controls the movement of the robotic fingers.

Inflation Edges Closer to Fed’s 2% Target

U.S. consumer spending rose solidly last month while, in another sign of economic growth, the Federal Reserve’s preferred measure of inflation reached its highest level in more than two years.

The Commerce Department said Monday that personal consumption increased 0.5% after gaining 0.2% in November. The gain was the biggest in three months and in line with economists’ expectations.

According to Reuters, spending accelerated as households bought motor vehicles and cold weather boosted demand for utilities amid a rise in wages

“Consumers keep on spending to help the economy grow and inflation is stirring,” said Chris Rupkey, chief economist at MUFG Union Bank in New York. “The economy is at full employment. Time for the Fed to hoist sail on interest rates.” In December, the personal-consumption-expenditures (PCE) price index advanced 0.2% from the prior month and rose 1.6% from a year earlier, a 12-month increase last seen in September 2014.

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